Titan mining corporation has 9.1 million shares of common stock outstanding and 350,000 4 percent seminannual bonds outstanding, par value $1,000 each. The common stock currently sells for $39 per share and has a beta of 1.55, and the bonds have 10 years maturity and sell for 110 percent of par. The market risk premium is 7.9 percent, t-bills are yielding 5 percent and the company's tax rate is 40 percent.

What is the firm's market value capital structure?

Debt:

Equity:

If the company is evalutating a new investment project that has the same risk as the firm's typical project, what rate should the firm use to discount the profject's cash flows?

Discount rate: